Zimbabwe’s economic future looks bright provided the incoming Government quickly moves to deal with factors affecting growth, says Reserve Bank of Zimbabwe Governor Dr Gideon Gono.He said the Zanu-PF-led Government should move swiftly to roll out policies that encourage investment, capital, job creation, productivity and infrastructure development amid stagnating economic growth and deteriorating current account deficit.
Dr Gono made the remarks at the National Sports Stadium in Harare last week on the sidelines of the inauguration of President Mugabe as the Head of State and Government following his resounding victory in the July 31 harmonised elections.
“The economic prospects of this country are certainly bright in the medium to long term provided that in the immediate term we lay a strong foundation for delivery.
“Electioneering is over, what is important now is a set of economic policies that are going to be pursued by Government. As long as these policies encourage productivity, investment, discipline, employment creation and well-thought-out implementation of the indigenisation and empowerment programme, the future looks bright,” he said.
This comes as economic growth is losing steam, forcing Government to revise growth forecasts from 5 percent to 4.4 percent on declining metal prices and poor agricultural performance.
The RBZ chief said at this juncture Zimbabwe did not want reckless implementation of any programmes that have potential to scare away capital and investment.
“What we need at the moment is greater confidence and smart partnerships between the Government, business, labour as well as women and men on the street.”
Dr Gono said Zimbabwe needed to urgently mobilize investment capital from external markets so as to augment local resources while also engaging vigorously and tactfully external partners and all available sources of the much needed capital.
The RBZ governor said there was need to engage multilateral and bilateral friends so that the country can deal with its US$10 billion debt burden without whose solution the country would continue to be hamstrung in mobilising capital and lines of credit.
He also said that for Zimbabwe to achieve sustain- able growth there was critical need for a strong and supportive banking sector to mobilise deposits and lines of credit. He said liquidity in the sector needs augmentation through increased exports.
This would be further supported by lines of credit, more foreign direct investment, Diaspora inflows, portfolio investments and dividends among other sources.
This is in light of the fact that critical sectors of the economy such as mining, agriculture, tourism and manufacturing are in critical need of funding to boost production.
“The new Cabinet needs to hit the ground running if we are to make up for lost time. For instance, we need to urgently move to provide farmers with inputs like yesterday.”
To that end, he said the new Government should move with haste to mobilise inputs and distribute agricultural inputs before the onset of the rainy season.
“Experts predict that we will have early rains this year and if that turns out to be true then agriculture. . . needs urgent attention. We need to mobilise inputs for that purpose.”
Other sectors such as mining urgently needed funding support to boost volumes in the wake of the decline in prices of minerals on global markets. Manufacturing also requires billions of dollars in financial support to increase exports and reduce exports.
“We are faced with declining mineral prices for gold, platinum and other minerals and what we need now are volumes to make up for the loss in prices,” Dr Gono said.
The Reserve Bank chief said the energy sector needed to be capacitated to support not just mining activities but also agriculture and manufacturing sectors alike.
The infrastructure side of things would also require urgent attention alongside parastatals and local authorities which contribute 40 percent of gross domestic product. Dr Gono contends that the incoming Government should also find a solution to deal with the negative impact of sanctions or, alternatively, have them removed outright.
“These and other challenges require that the team that is going to form the next Government hit the ground running. If they do not attend to these issues the population will be disappointed and this should not be allowed to happen,” Dr Gono said.
“Attend to these and the future of this economy stands second to none in Africa.” The Herald